Kerafed becoming a milch cow for officials

Kerafed, saddled with insurmountable problems, is again in the news for all the wrong reasons. The Finance Department has now indicted it for gross mismanagement and financial misappropriation. The inspection wing of the Finance Department in its report, which is with Express, has revealed irregularities in maintaining accounts, favouritism in promotions and illegal procurement of copra among other things.The report says that proper auditing has not been taking place in Kerafed since 2009. The liability of the company had been increasing every year, it said. As the company was in loss, the govts loan of `25.8 crore was converted into equity. But the officials behave in such a manner that the liability of the company had increased every year even after the govt had taken steps to bring down the losses, it says.Agriculture Minister K P Mohanan told Express that he has not got the report. Once I get the report, I will look into it, he said.Kerafed MD K Pratapan told Express that corrective measures have to be taken as public money is involved. Public money has to be judicially spent, he said.With regard to maintaining accounts, the Finance wing said that the officials had some special interestin depositing `31.54 crore with the Kozhikode District Cooperative Bank.The bank was chosen even though others had offered more interest rates. It noted that the bank president was also a member of the Kerafed board when the money was deposited with it.It also said that the fixed deposits were made on the basis of telephonic conversations and not by maintaining proper records. I had specially written in the file that deposits should be made after checking the rates in other banks. But this was violated, Pratapan said.Another issue highlighted in the report is that of salary revision. The govt, through an order, had stated that no salary revision should be done without prior permission. The Finance Department said that 13 posts were created without the sanction of the government or the cooperative registrar.Though the director had written to the govt on June 21, 2010 for ratifying the posts, the govt in its reply on August 8, 2010, had denied it.Of the 13 posts, four were created only for paving the way for promotions, it said. The Finance Inspection wing also came across irregularities in promoting the assistant managers to the deputy manager post.The note says that the then MD should not have acted thus as the company was under the control of the government.Later, one of the deputy managers was promoted to the post of director (finance) even though the new MD had objected to it.With regard to the promotion of director (finance), Pratapan said that the board had taken a unilateral stand. I had specifically said that only qualified persons should be made the director, he said.